Agricultural Property Relief Changes

“As we look back to last month and the highly successful event held at the Ringfeeder Cafe, where Bright Solicitors were joined by Stags to discuss the changes to Agricultural Property Relief, it’s time for us to look at the changes and what they may mean for the future of farmers.“

The 2024 Budget and Agricultural Property Relief Changes

On 30 October 2024, the government introduced major changes to Inheritance Tax (IHT) rules. These changes specifically affect Agricultural Property Relief (APR) and Business Property Relief (BPR). Farmers and landowners should take note of how these updates may impact future succession plans.

What Qualifies as Agricultural Property?

The budget did not drastically alter the definition of agricultural property. However, it now includes land used in approved Environmental Land Management Schemes. This expansion provides clarity and opportunity for environmentally focused farming.

New APR and BPR Allowance Limits

Previously, assets qualifying for APR or BPR received either 100% or 50% relief from IHT. From 6 April 2026, a new combined allowance of £1 million will apply to both APR and BPR assets. Only the first £1 million of qualifying assets will receive 100% relief. Any amount above that threshold will receive only 50% relief.

Unlike other allowances, the new APR/BPR allowance will not transfer between spouses.
This means each person has a single, non-transferable £1 million allowance.
Families should factor this into their long-term tax planning strategies.

Anti-Forestalling Rules Already Apply

Anti-forestalling measures came into effect on 30 October 2024. They aim to prevent last-minute planning that avoids the new rules. For example, if someone gifts qualifying property after 30 October 2024, and dies after 5 April 2026 (but within seven years), the new rules will apply. This applies even if the gifted property qualified for more than £1 million of relief at the time of the gift.

What Should Farming Families Do Now?

We strongly encourage farming families to review their existing plans. Many clients start this process by reviewing or updating their Wills. This ensures their estate makes full use of all available allowances.

At Bright Solicitors, we work closely with accountants, land agents, and valuers. This helps us give you accurate advice, supported by the right information and calculations. Together, we can explore your options and protect your farm’s future.

If you’ve already planned before the budget, now is the time to revisit those plans. If you haven’t yet thought about succession, we recommend doing so soon.

Contact a member of our specialist Private Client team for personalised advice. Email Carly.Jeffery@brightllp.co.uk or call 01752 968442.